Friday, February 21, 2014Last Update: 8:49 AM PT

Whistle-Blowing Doctor's Suit Ready to Advance

SAN FRANCISCO (CN) - A doctor need not exhaust administrative remedies if he is blowing the whistle on a hospital, rather than just alleging wrongful termination, the California Supreme Court ruled. Thursday's decision stems from nephrologist Mark Fahlen's 2011 lawsuit against Sutter Central Valley Hospitals and its COO Steve Mitchell in Stanislaus County Superior Court. Fahlen claimed Sutter got him fired from his medical group, and then used medical disciplinary proceedings to retaliate against him for reporting substandard nursing care. In recounting Fahlen's allegations, the court noted Fahlen had "argued with hospital nurses who assertedly failed to follow his patient treatment instructions. ... On several of these occasions, he reported to nursing supervisors, or in writing to the hospital's administration, that nurses had been insubordinate and had provided substandard care." Gould Medical Group, Fahlen's employer, allegedly fired him after Mitchell, the COO, contacted them about "plaintiff's disruptive interactions with the hospital's nursing staff." "Mitchell hoped that Gould's director would meet with plaintiff, that plaintiff would get angry during the meeting, that Gould's director would react by terminating plaintiff's employment, and that plaintiff would leave town," the decision continues. Moving did not fit Fahlen's plans, however, since he hoped to open a private practice. Instead, "Mitchell told plaintiff he should resign from the hospital staff and leave town, or the hospital would begin an investigation and peer-review proceeding that would result in a report to the Medical Board of California," according to the ruling. Because of Fahlen's fights with the nurses, Sutter's Medical Executive Committee (MEC) recommended against renewing his hospital privileges. The hospital's Judicial Review Committee (JRC) did not agree, noting he had since attended anger-management counseling. Ultimately the decision fell to the Board of Trustees, which sided with the MEC. Instead of submitting a petition for writ of mandamus to set the decision aside, Fahlen sued. The defendants claimed that Fahlen had failed to exhaust administrative remedies, but the trial court refused to dismiss the suit and the Court of Appeal concluded that Fahlen could pursue claims based on Section 1278.5 of the state Health and Safety Code, a whistle-blower statute for health care workers. The unanimous California Supreme Court affirmed Thursday. "We conclude that when a physician claims, under section 1278.5, that a hospital's quasi-judicial decision to restrict or terminate his or her staff privileges was itself a means of retaliating against the physician 'because' he or she reported concerns about the treatment of patients, the physician need not first seek and obtain a mandamus judgment setting aside the hospital's decision before pursuing a statutory claim for relief," Justice Marvin Baxter wrote for the court. Indeed, requiring whistle-blowers to first succeed in a mandamus challenge "would seriously undermine the Legislature's purpose to afford a whistleblower on a hospital medical staff the right to sue," Baxter added. "A hospital disciplinary proceeding against a member of the medical staff is ostensibly focused on concerns about the physician's professional fitness, not on redressing his or her claims of whistleblower retaliation. Indeed, plaintiff asserts here that the hospital proceeding was the very means of retaliation."